EU-India: reincarnation of a strategic partnership

These (deliverables) include a partnership on water management, a platform on energy and climate cooperation, a forum on urban development, a partnership on migration and mobility as well as soft loans worth €450 million on connectivity from the European Investment Bank (EIB) amongst others.

The summit even yielded a five-year EU-India agenda for action 2020. Although the ultimate panacea of the long-stalled EU-India free trade agreement (FTA) continues to remain elusive, the summit managed to relaunch the long-static strategic partnership.

Taking place amidst heightened security in Brussels following the terror attacks of 22 March, the occasion also marked a potent display of Indian solidarity with the EU, and Belgium in particular.

India, which has faced decades of terrorism mainly emanating from its neighbours, has over the years built cooperation with the EU on counter terrorism. A joint declaration on terrorism was also issued at the summit.

Diplomatic row

The EU and India have since 2004 acknowledged each other as strategic partners albeit without really recognising either as strategic. Although the relationship has been broad-based, it has focused scrupulously on trade, so much so that the partnership has in recent years inadvertently been pegged to the outcome of the free-trade talks - under negotiation since 2007.

The EU-India relationship has also been marred by a diplomatic row between India and Italy over the case of two Italian marines detained in India for allegedly killing two Indian fishermen.

The summit therefore proved to be highly imaginative by redirecting the partnership towards practical cooperation in strategic, mutually appealing areas, beyond trade.

Pet projects

Astutely, a number of the summit’s deliverables create a link to Indian Prime Minister Narendra Modi-led government’s pet projects - Smart Cities, Clean-India, Clean-Ganga, Digital India, and so on. These initiatives also foresee better involvement of the business community on both sides.

The proposed urban development dialogue (an idea first recommended by the author) would help EU member states tap into the vast opportunities offered by India’s massive urban development while contributing to the same.

The water partnership envisages joint cooperation on water management, adaptation and customisation of technologies as well as efforts to clean up India’s most iconic river, the Ganges or Ganga.

While the partnership on energy and climate change will provide a concrete platform for the EU and India to further develop cooperation on renewable energy, energy security and climate change. To this extent, a new joint working group on energy security is envisaged.

India stands at the threshold of an energy transformation with significant scope for renewable energy, an area in which certain EU member states are global leaders.

2020 agenda

The summit also registered an agenda for action 2020 aimed at streamlining the strategic partnership by outlining concrete priorities for the next five years. The last EU-India joint action plan (JAP) was adopted in 2005 (reviewed in 2008). Although the current action plan is long overdue, like the JAP, it crucially lacks timelines.

Remarkably though, the summit joint statement has little mention of the EU-India FTA. The partnership’s biggest initiative, the FTA remains vital. EU-India trade in goods, the mainstay of the relationship, has been steadily contracting - from €80.52 billion in 2011 to €72.58 billion in 2014, according to European Commission data.

Unquestionably the FTA would boost bilateral trade, bringing in particular a degree of growth to the sluggish economies of EU. In 2015, India displaced China to become the fastest growing major economy with a GDP growth rate of around 7.6 percent.

Free trade talks

The last round of FTA negotiations was held in May 2013. Talks remain stalled over a panoply of impediments, the most notable of which concerns the difference in the level of ambition - while the EU aims for a far-reaching complete agreement which would slash tariffs on 95 per cent of all goods, India is willing to sign an imperfect agreement which can be ameliorated in time.

Specific disputed sectors include cars, liquor and services. The services sector is particularly important for India, which seeks greater mobility for its growing population of highly skilled professionals and IT specialists. Although FTA talks will eventually be resumed, speed is of the essence.

Procedures following conclusion of negotiations, which include translation in all official languages, legal scrubbing and ratification by all EU member states and the European Parliament, usually last four or five years.

Overall, the summit succeeded in rebooting the EU-India strategic partnership. While the FTA will continue to be a contentious issue in EU-India relations for some time, the summit has not only brought leaders from both sides together after a uncomfortable hiatus of four years, but has also opened up an array of innovative and exciting new areas for cooperation.

Gauri Khandekar is director-Europe of the Indo-European think tank Global Relations Forum, based in Brussels